Reply to: Value Added By Agencies

[DodgyAgent]

You should try dialling using your other fingers, not your thumbs

I have staff for that

[MrMarkyMark]

I sometimes find this a bit onerous

You should try dialling using your other fingers, not your thumbs

[LondonManc]

Anyway the model I was referring to was meant to support plain body shopping, no technical leadership or accountability of project delivery.

As you've probably realised by now, the barriers to entry are considerable and the hidden costs and risks involved may be prohibitive for the margins achieved versus expected.

[MrMarkyMark]

Anyway the model I was referring to was meant to support plain body shopping, no technical leadership or accountability of project delivery.

Maybe not officially, though if you do not provide those, you guys as a small entity won't last 5 minutes.

Only the big consultancies are "allowed" to fail to deliver on those items

[DodgyAgent]

, with very little effort, just a few calls.

I sometimes find this a bit onerous

[MaltSokol]

Anyway the model I was referring to was meant to support plain body shopping, no technical leadership or accountability of project delivery.

[MrMarkyMark]

Do you mean carrying out fixed price work or maintenance on a T&M basis? If you are then the client will want above all else a secure supplier. I have encountered contractors in the past who have taken on support work and built a business around the work they have done as a contractor. I have never understood why more contractors have not done this. I have also encountered contractors that have hired additional contractors through their own company. A number of successful agencies have sprung up out of these. I am not sure however that the low margin "tight process" high volume model is very attractive to these type of entrepreneurial contractors.

Its a little different than the usual model in that other agencies won't get a look in when there is recruitment for that particular area.
Still run by an agency, but separate from their usual operations.
Unsure what the financial model is, fixed price, commission etc. as I haven't asked those questions.

I've tried a few times, its difficult in IB, for some of the reasons I outlined earlier, PSL, internal agencies running HR, TCS effect etc.

Still, I remember I made a few extra bucks out of it at the time, with very little effort, just a few calls.

[DodgyAgent]

Depends what you mean by the definition.

This model is totally separate from the agency model, its about building teams and taking whole responsibility for an area, say Market Risk for example.

Almost like outsourcing it?

Do you mean carrying out fixed price work or maintenance on a T&M basis? If you are then the client will want above all else a secure supplier. I have encountered contractors in the past who have taken on support work and built a business around the work they have done as a contractor. I have never understood why more contractors have not done this. I have also encountered contractors that have hired additional contractors through their own company. A number of successful agencies have sprung up out of these. I am not sure however that the low margin "tight process" high volume model is very attractive to these type of entrepreneurial contractors.

[MrMarkyMark]

The managed service model of agencies operating at 3% margins has been around for 16 years or so.

Depends what you mean by the definition.

This model is totally separate from the agency model, its about building teams and taking whole responsibility for an area, say Market Risk for example.

Almost like outsourcing it?

[DodgyAgent]

There quite a few bigger agencies looking at what I would call the managed service model, if that is what you are on about.

I was looking at setting up one myself, with a big agency, until senior management decided those technical wizards at TCS would be a better option .

I may join up with one next time around, as it gives you protection against rate cuts and possibly furloughs that are so prevalent in the banking industry.

The managed service model of agencies operating at 3% margins has been around for 16 years or so.

[MrMarkyMark]

FWIW Hays are doing exactly what you're describing for 4% where I am at the moment

There quite a few bigger agencies looking at what I would call the managed service model, if that is what you are on about.

I was looking at setting up one myself, with a big agency, until senior management decided those technical wizards at TCS would be a better option .

I may join up with one next time around, as it gives you protection against rate cuts and possibly furloughs that are so prevalent in the banking industry.

[malvolio]

That's a net working capital of £1.5m. Financing for 85% invoice value comes at 3% fee and the remaining £225k are to be kept in cash...
And with said 2% net margin, that's £8.5k made per month.
I agree it's unclear how to reach those numbers commercially, but that's not a bad return for my £225k
Should I put it in a forex trading account instead?

You're forgetting accounting rules around capitalisation. The necessary money has to be properly available at all times or you are trading while insolvent. The debt liability exists on your accounts even if you never have to pay it out.

[DodgyAgent]

I think he's purely talking about acting as a middleman for client to contractor direct links who would prefer a middleman involved, suggesting that he can do it cheaper.

Somebody has to sell or market the product. This is an extremely costly exercise as clients will not see the idea unless it is literally rammed down their throats.

[pr1]

FWIW Hays are doing exactly what you're describing for 4% where I am at the moment

[MaltSokol]

B2b can be anything up to 90 days and I'd imagine some of them are around that. Try the sums with that figure on. I would be a little careful with what agents tell you unless he's a mate and you knows he's telling the truth.

That's a net working capital of £1.5m. Financing for 85% invoice value comes at 3% fee and the remaining £225k are to be kept in cash...
And with said 2% net margin, that's £8.5k made per month.
I agree it's unclear how to reach those numbers commercially, but that's not a bad return for my £225k
Should I put it in a forex trading account instead?